How high cost of transportation, others pushing inflation in Nigeria

By Temitope Adebayo

The high cost of transportation is one of the major challenges dampening the economic growth of the country and eroding consumer purchasing power, due to increases in the price of basic amenities which is causing rise in inflation.

Although, the high costs of diesel, petrol and the poor state of rural roads are some of the factors contributing to the high cost of transportation.

The price of diesel has increased from about N250 per litre in 2021 to over N700 now, forcing transporters to increase their fares and charges.

The pump price of petrol, the transport associations also pointed out, has increased from about N97 in 2015 to about N180 or more, forcing up the landing costs of most food items.

Data released by the Nigerian Bureau of Statistics (NBS) showed that the rising prices for gas, liquid and solid fuels, and transportation by road and air were some of the major factors contributing to the increase in core inflation.

These factors have been identified as factors pressuring Nigeria’s inflation rate, which reached a new high of 19.64 per cent in July.

This is the seventh consecutive month of inflation rise and the highest point in 12 months, increasing to 1.75 percent month-on-month.

Transportation costs increased to 17.56 percent on a year-to-year basis from N342.3 in 2021 and showed a 1.61 percent increase on a month-to-month basis.

“The highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing,” NBS stated.

Data obtained from NBS showed that the average retail price for refilling a 12.5kg cylinder of cooking gas increased by 121.2 percent to N9,486 in June 2022 from the same period in 2021. On a month-on-month basis, it also rose by 8.7 percent from N8, 726 in May.

Also, the price for refilling a 5kg cylinder of cooking gas increased year-on-year by 103.9 percent to N4, 218 in June 2022. On a month-on-month basis, it also rose by 7.6 percent.

NBS Transport Watch for June noted that the average fare paid by commuters for bus journeys within the city per drop rose by 42.02 percent from N410.23 in June 2021 to N582.61 in June 2022, it increased by 0.10 percent month-on-month from N582.06 in May 2022 to N582.61 in June 2022. On a year-on-year basis, the fares rose by 45.21 percent from N2522.44 in June 2021.

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Diesel’s average retail price paid by consumers increased by 202.67 percent on a year-on-year basis, while petrol’s average retail price increased to N175.89 in June 2022 from N165.61 recorded in June 2021, indicating a 6.21 percent increase, according to NBS data.

“From a lower cost of N242.43 per litre recorded in the corresponding month (June) of last year to a higher cost of N733.78 per litre in June 2022.”

The business of transportation is a very profitable one. Apart from being the largest employer of labour, it is unanimously one of the few businesses in Nigeria that has an existing targeted audience.

While speaking with some commercial drivers, Mr Adekunle Ajadi decried the cost of petrol and cited it as one of the critical factors responsible for the high cost of transportation in the country.

He added that a litre of petrol sold at the rate of N165.00 as of early last year is now N250-N270 per litre.

Most commercial drivers exhaust their gains or profits on petrol, finding it difficult to provide for their respective families. I just want to appeal to the government to do something about the price of petrol, Ajadi said

Another driver identified as Tunde said, the high price of spare parts and artisans’ charges are parts of things causing a hike the transportation.

According to him, price hike and scarcity of spare parts remains a clog the price of second-hand spare parts is also high and the charges of mechanics and panel-beaters are not pleasant too.

The skyrocketed prices of spare parts have made it difficult for drivers to repair faulty vehicles instead they manage the faulty vehicles in transporting people and goods to their various destinations.

He added that it now requires deep thought and fear to take faulty vehicles to mechanic workshops due to high charges. We have to increase the transport fare, as you can not blame us, we also have wives, children to feed, rent to pay, and school fees to settle.